The company reaches an accumulated profit of 671 million in the first nine months of the year
Inditex registered a profit of 866 million euros in the third quarter of its fiscal year 2020-2021 (between August 1 and October 31), which represents a decrease of 13% compared to the same period of a year before the constant exchange rate, and reached an accumulated profit of 671 million euros during the first nine months of the fiscal year (between February 1 and October 31).
In this way, the company leaves behind the ‘red numbers’ of the first fiscal semester when it recorded losses of 195 million euros in a context marked by the impact of Covid-19.
The accumulated profit for the first nine months, below the 2,720 million euros a year earlier, includes a provision for the conclusion of the optimization program presented in June.
The group’s sales in the first nine months of 2020 reached 14,085 million euros compared to 19,820 in 2019.
Inditex has highlighted that in the third quarter, the recovery since March is “patent”, with sales of 6,052 million euros, compared to 7,000 million in 2019.
During this third quarter, 5% of the stores were closed and 88% had significant limitations of space, hours, or capacity.
In this environment, sales at a constant exchange rate between October 1 and 18 had already reached the highs for the same period in 2019.
In November, 21% of the group’s stores were closed and 8% are currently temporarily closed, while an additional 10% are closed on weekends.
According to the company, a significant number of stores maintain relevant capacity restrictions, space limitations, and opening hours.
Despite these conditions, sales at constant exchange rates in the month of November reached 81% of the previous year, while from December 1 to 10 they already accounted for 87%.
Sales ‘online’, meanwhile, have maintained a “very good performance” throughout this period and during the first nine months of the year, they have grown by 75% at constant exchange rates compared to the same period of the previous year, 76% in the third trimester.
In the first nine months, the gross margin remained at 58.0% of sales, compared to 58.2% in the same period of 2019, thanks to the management of the business model. At constant exchange rates, the gross margin grew 110 basis points to 59.3%.
Historical cash maximum
Operating profit (Ebitda) reached 3,334 million euros in the first nine months, compared to 5,702 million a year earlier, and operating profit (Ebit) stood at 946 million, below the 3,548 million of a year before. The first quarter included a provision for digital store integration.
Likewise, the company has highlighted that the “strong” cash generation in the quarter is directly reflected in the net financial position, which increased by 7% and reached its historical maximum, 8,265 million euros.
The president of Inditex, Pablo Isla, stressed that the results are a direct consequence of a “very efficient” management in all areas of the company, with precise coordination between all stages of its model -design, product, manufacturing, logistics, stores and ‘online’.
“They are also a recognition of the daily capacity to react and adapt to an environment that is difficult to foresee, and the unwaivable commitment to offering the best quality of product and service,” he stressed.
